FTSE 100 Set to Dip as Investors Await Bank of England Policy Decision
London's FTSE 100 is forecast to open lower on Thursday, stepping back from the record closing high of 10,402.34 it set in the previous session. Futures trading points to a modest decline of around 18 points as investors adopt a cautious stance ahead of the Bank of England's monetary policy decision later today.
The retreat follows a strong rally that saw the index gain nearly 88 points on Wednesday, though it failed to hold its intraday peak. The pre-meeting pullback reflects typical market prudence, with traders locking in profits and repositioning ahead of potential volatility stemming from the central bank's updated economic assessment and forward guidance on interest rates.
Global markets presented a mixed backdrop. On Wall Street, the Nasdaq Composite fell 1.5%, dragged down by continued weakness in software and technology stocks, which also contributed to a 0.5% dip in the S&P 500. In a contrast, the Dow Jones Industrial Average rose 0.5%, supported by gains in defensive and industrial sectors.
Asian equity markets were divided in Thursday's trading. South Korea's Kospi led the region's gains, while Japan's Nikkei and India's Sensex traded lower. China's Shanghai Composite, however, managed to edge higher.
Market Voices
Eleanor Vance, Portfolio Manager at Sterling Capital: "This is a classic 'wait-and-see' pattern. The FTSE's run has been impressive, but sustainability depends on the BoE's tone. A hawkish hold could dampen the recent enthusiasm, especially for rate-sensitive sectors."
Marcus Thorne, Independent Financial Analyst: "The slight dip is a healthy consolidation, not a reversal. The underlying momentum, driven by robust corporate earnings and a weaker pound benefiting exporters, remains intact. Today's meeting is more about fine-tuning expectations."
Rebecca Shaw, Editor at 'The Critical Investor' Blog: "It's absurd. The market hits a nominal record one day and trembles the next over a foregone conclusion—rates aren't changing today! This exposes the short-term gambling mentality that dominates, not real investing. The BoE is behind the curve, and this index is floating on hot air."
David Chen, Strategist at Global Crossings Asset Management: "The global divergence is key. The FTSE's relative resilience, compared to the tech-led selloff in the US, highlights its different sectoral composition. Investors are seeking value and yield, which the UK market can provide, irrespective of today's single policy event."